World Markets for Organic Fresh Citrus and Juice1

World Markets for Organic Fresh Citrus and Juice1

Archival copy: for current recommendations see http://edis.ifas.ufl.edu or your local extension office.
HS978
World Markets for Organic Fresh Citrus and Juice1
James J. Ferguson2
International markets for organic foods have
increased from $16 billion in 2000 to $20 billion in
2001, with the International Trade Center, Food and
Agricultural Organization (FAO) of the UN
forecasting $23 to 25 billion in 2003 and $30 billion
in retail sales by 2005. This rapid expansion,
combined with price premiums for organic produce,
has attracted farmers faced with declining prices for
conventionally grown produce. However, with
organic sales now less than 2% of the overall food
market and estimated growth ceilings of 3.5 to 5% in
developed countries by 2010, economic and market
information is needed to guide grower decisions
about possibly converting to organic production.
Given the lack of official foreign trade data on
organic sales, Pascal Liu, Commodities Specialist,
The Food and Agriculture Organization, has
interviewed trade and industry figures and reviewed
available sources to develop a perspective on the
current market situation and medium-term prospects
for fresh organic citrus and juices. Information
presented here is based on his May, 2003 paper on
World markets for Organic Citrus and Citrus Juices,
available at
http://www.fao.org/es/ESC/common/ecg/
28303_en_CitrusorganicEN.pdf. This fact sheet
summarizes the above FAO publication as a general
aid to Florida organic citrus growers and others in
assessing their export potential for international
markets.
Fresh Organic Citrus Markets
World production of organic citrus in
approximately 30 countries was about 600,000 metric
tons (661,200 US tons or 14,693,333 90-lb boxes) in
2001, 0.6% of total citrus production. The European
Union (EU) market for both certified organic fruit
and vegetables was estimated at $1.7 billion in 2002,
with fresh organic citrus representing 5-7% of all
fresh fruit and vegetable sales and 37% of all organic
fruit sold. However, consumption of fresh organic
citrus in the EU is still relatively low compared with
overall fresh fruit use. Major constraints on
additional market share include poor fruit quality and
packaging, short shelf life, and inefficiencies in the
marketing chain.
Major exporters of organic fresh citrus to the EU
include Italy, Spain, Argentina, the U.S., and Greece.
Brazil, Israel, Costa Rica, the U.S., Italy, Mexico, and
Cuba are major exporters of organic citrus juice
(Table 1).
1. This document is HS978, one of a series of the Horticultural Sciences Department, Florida Cooperative Extension Service, Institute of Food and
Agricultural Sciences, University of Florida. Publication date: May 2004. Please visit the EDIS Web site at http://edis.ifas.ufl.edu.
2. James J. Ferguson, professor, Horticultural Sciences Department, Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of
Florida, Gainesville, 32611.
The Institute of Food and Agricultural Sciences (IFAS) is an Equal Opportunity Institution authorized to provide research, educational information and
other services only to individuals and institutions that function with non-discrimination with respect to race, creed, color, religion, age, disability, sex,
sexual orientation, marital status, national origin, political opinions or affiliations. U.S. Department of Agriculture, Cooperative Extension Service,
University of Florida, IFAS, Florida A. & M. University Cooperative Extension Program, and Boards of County Commissioners Cooperating. Larry
Arrington, Dean
Archival copy: for current recommendations see http://edis.ifas.ufl.edu or your local extension office.
World Markets for Organic Fresh Citrus and Juice
According to 2001 FAO reports, Italy is the main
supplier of fresh organic citrus for the EU, producing
222,000 metric tons (244,644 US tons or 5,436,533
90-lb boxes) of fresh organic citrus (oranges,
tangerines, lemons) on approximately 10,800 ha
(266,868 acres) in Sicily and Calabria. Spain
produced 25 to 30,000 metric tons (27,550 - 33,060
US tons or 612,222 - 734,667 90-lb boxes) on 900 ha
(2,224 acres) in Andalusia. Together, Italy and Spain
supply over 95 percent of the fresh organic citrus
consumed in the EU. The remaining 5 percent is
imported from Mediterranean countries like Morocco
(primarily oranges), Israel (primarily grapefruit),
Argentina, South Africa, the USA, and Uruguay,
especially during the EU off-season when
citrus-producing member countries are not shipping
fresh fruit.
Although there is potential for expansion in this
market, additional land in Brazil and Italy, totaling
13,376 ha (32,102 acres), is being converted to
organic citrus production, with the potential for
oversupplying markets. Other import constraints
include a 10.4 percent ad valorem tariffs on imported
fresh oranges, internal EU marketing and organic
certification agreements, and an underlying
assumption that EU organic certification programs
are more strict and reliable than those of other
countries.
Selected EU countries in this survey imported
approximately 53-55,000 US tons of fresh organic
citrus in 2000, with Germany, France, the UK, and
Austria being major importers (Table 2). Germany is
the largest single market for organic foods in the EU
and the second largest in the world, with Austria and
Denmark having the highest per capita consumption
of organic products in general. The fresh citrus
import market in the Netherlands is unique in that this
country is a key entry point, re-exporting imported
citrus to other EU countries, partially due to less
complicated organic import procedures than other EU
countries.
Prices for fresh EU organic citrus vary with
seasonal availability of fruit, market location, and
type of retail outlet. Prices for imported citrus are
generally higher during the off-season for EU citrus
production. Fresh organic citrus sells, on average, for
2
65 percent higher than conventionally grown citrus
but premiums range from 17 percent in Greece to 144
percent in Finland. Organic citrus is also cheaper in
countries where a substantial share of organic produce
is sold in supermarkets rather than smaller health food
stores.
Market Prospects
Consumption of organic citrus still remains low
in the non-citrus producing countries within the EU.
However, the integration of ten more central and
eastern European countries into the EU in 2004 could
increase markets. Decreasing prices along with
increased production, and improved post-harvest and
market efficiencies could also increase consumption.
However, with Italy and Spain remaining the main
supplier of organic citrus in the EU, other marketing
opportunities will fall to those with preferential trade
agreements with the EU, with fruit available from
May to September when EU produced supplies are
low and for organic grapefruit and limes. Temperate
climate countries with already established large
organic markets like the UK, Germany, and Austria
may also remain good import markets, as could
countries with small but growing organic markets like
France and the Scandinavian countries.
In the 1999-2000 season, 35 percent of all
Florida grapefruit was exported to Japan. However,
until the adoption of legislation defining organic
standards under the Japanese Agricultural Standard
(JAS) in 2000, it has been difficult to assess the
Japanese market for imported organic citrus,
primarily grapefruit. Phytosanitary restrictions, JAS
organic standards, and high ad valorem tariffs have
also limited imports of fresh citrus, currently about
0.1 to 0.2 percent of the total citrus market. Given its
large population with a relatively high per capita
income and focus on health concerns, conservative
estimates predict Japan's organic market for fresh
organic citrus fruit could grow to mature market
potential of 3 to 5% of the total citrus market by
2010.
Organic Juice Markets
The major organic citrus juice market is for
orange juice, with recent sales for Not From
Concentrate (NFC) increasing more than for Frozen
Archival copy: for current recommendations see http://edis.ifas.ufl.edu or your local extension office.
World Markets for Organic Fresh Citrus and Juice
Canned Orange Juice (FCOJ). Smaller markets also
exist for grapefruit juice produced in the USA, Cuba,
and Israel and lemon juice in Argentina and Spain
(Table 3).
The main markets for all organic fruit and
vegetable juices combined are the UK, Germany,
Italy, France, and Scandinavian countries, with retail
sales increasing more than 20 percent per year since
1998. The present EU market for organic juice in
general is only 0.57 percent of the total EU juice
market. Organic citrus juice by itself accounts for
only 0.3% of total citrus juice consumption within an
average 2% market share for organic produce
generally. This small current market share, combined
with large supplies, decreasing prices, and increased
availability in supermarkets, suggests considerable
growth potential. Israel (5-6000 metric tons or 5,510
- 6,612 US tons), Brazil (1,500 metric tons or 1,653
US tons), the USA (1000 metric tons or 1,102 US
tons), Costa Rica (1000 metric tons or 1,102 US
tons), and Argentina (114 metric tons or 126 US
tons) were the major NFC suppliers of NFC for the
European Union in 2001-2002. Mediterranean
countries, with closer proximity to EU markets than
Florida or Brazil, have a decided advantage in
exporting NFC organic juice to the EU.
Brazil is the largest supplier of FCOJ for the
European Union, followed by the USA, Cuba, Israel,
and Costa Rica. Highly competitive in the
conventionally produced FCOJ market, Brazil is
expected to maintain this lead in the organic FCOJ
market. With additional acreage coming into
production and considerable storage capacity,
international organic citrus producers have
anticipated significant growth in this market, without
increased demand actually occurring yet. As a result
60 and 35 percent price premiums for FCOJ and NFC,
respectively, in 2002 are declining and the market
appears to be awaiting greater demand.
The major consideration, according to Pascal
Liu, for Florida growers planning to ship to
developed countries include:
• Ability to meet specific requirements of the
target market (phytosanitary requirements,
quantity and quality, packaging, consistency, and
scheduling deliveries)
3
• Profit margins in terms of production costs and
various price premium scenarios
• Targeted market tariffs and preferential market
access agreements
• Target market acceptance of organic
certification
Archival copy: for current recommendations see http://edis.ifas.ufl.edu or your local extension office.
World Markets for Organic Fresh Citrus and Juice
4
Table 1. Main European Union suppliers of certified organic fresh citrus and juice in 2001.
Production Area
European Union
Untied States
Estimated Production
Main Export Products
Industry status
Metric tons
US or short tons
(90-lb boxes)
Fresh fruit
Juice
290,000
319, 580
(7,101,778)
oranges,
tangerines,
lemons
---
stable
100 - 120,000
110,200 - 132,204
(2,448,889 -2,938,667)
110,200
(2,448,889)
oranges
orange juice
output growing
---
orange juice
(FCOJ, NFC)
output growing
Brazil
100,000
Costa Rica
50,000
55,100
(1,224,444)
---
orange juice
(NFC)
output stable
15 -20,000
16,530 - 22, 060
367,333 - 490,222
grapefruit
orange and
grapefruit
juices
output stable
Argentina
7,000
7,714
(171,422)
oranges,
lemons
---
output growing
Cuba
6,000
6,612
(146,993)
---
conc. oranges
and grapefruit
juices
output growing
South Africa
4,000
4,408
(97,956)
oranges,
grapefruit
---
output growing
3-5,000
3,306 - 5,510
(73,467 - 122,444)
oranges
---
output growing
not available
---
oranges, limes
orange juice
---
Israel
Morocco
Mexico
Source: Pascal Liu. 2003. World Markets for Organic Citrus and Citrus Juices
Table 2. Estimated net imports of fresh organic citrus in selected EU countries (2000).
Importing
country
Austria
Exporting country
Metric tons
US or short tons
Equivalent 90-lb boxes
Spain, Greece, Israel
7-8,000
7,714 - 8,816
171,422 - 195,911
Belgium
-
500 - 1,000
551 - 1,102
12,244 - 24,289
Denmark
Spain, Italy
2,000
2,204
48,978
France
9,000
9,918
200,000
Germany
Italy, Spain, Israel,
South Africa
Italy, Spain
13,000
14,326
318,356
Netherlands
-
7,000
7,714
171,422
Sweden
Spain, Italy
500 - 1,000
551 - 1,102
12,244 - 24,289
UK
Italy, Spain
8,000
8,816
177,718
Finland
Spain, Italy
500
551
12,244
Ireland,
Luxembourg
-
500
551
12,244
Total
48 - 50,000
52,896 - 55,100
Source: Pascal Liu. 2003. World Markets for Organic Citrus and Citrus Juices.
1,175,467 - 1, 224,444
Archival copy: for current recommendations see http://edis.ifas.ufl.edu or your local extension office.
World Markets for Organic Fresh Citrus and Juice
5
Table 3. Estimated European Union imports of organic FCOJ in 2002.
Supplying country
Product
Imports
Metric tons
US or short tons
Brazil
orange
2,000 - 2,500
2,204 - 2,755
USA
orange and grapefruit
1,000
1,102
Cuba
orange and grapefruit
350
386
Israel
orange, grapefruit and mandarin
100
110
orange
lemon
200
28
220
31
Costa Rica
Argentina (2001)
Source: Pascal Liu. 2003. World Markets for Organic Citrus and Citrus Juices.